Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Nigerian Inflation Rate May Stay Under Forecast High

Aug. 24 (Bloomberg) -- Nigeria’s inflation rate may not rise as high this year as the central bank previously forecast after the government cut a gasoline subsidy, Governor Lamido Sanusi said.

Inflation in Africa’s top oil producer may peak this month or in September before declining toward the end of the year, he told reporters yesterday in Abuja, the capital. Inflation was little changed at 12.8 percent in July, below the median estimate of 13.9 percent in a Bloomberg News survey. The Central Bank of Nigeria had previously forecast it would reach as high as 14.5 percent in the third quarter.

The central bank has kept its policy rate unchanged at a record 12 percent this year, after raising it by 5.75 percentage points in 2011 to curb price pressures.

“The tightening of monetary policy has been very effective in terms of keeping the exchange rate fairly within the band,” which damps down the impact of imported inflation, Sanusi said. The bank sells foreign currency at a biweekly auction to keep the naira within a 3 percent band around 155 per dollar.

Nigeria’s foreign-currency reserves have reached more than $40 billion “for the first time in a long time,” Sanusi said. “We hope if we can build up the reserves, maintain a fairly stable exchange rate, and we see inflation come down, then we can look at the situation in the next 2-4 months.”

As the inflation rate is expected to remain above the central bank’s target of below 10 percent, “we do not expect any monetary policy rate cuts in the short term,” Yvonne Mhango, an economist at Renaissance Capital in Johannesburg, said in an e-mailed response to questions.

The naira has gained 2.4 percent in interbank trading this year, reaching 158.4 against the dollar as of 11:50 a.m.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.